Nasdaq tumbles 1.8%, S&P 500, Dow Jones down in red as PCE data increases rate hike bets; tech stocks in focus

US benchmark equity market indices tumbled after opening lower on Thursday, October 29, as Wall Street investors focused on heated PCE inflation data for the American economy, which further bolstered bets for an upcoming rate hike at the December US Federal Reserve policy meeting.

Tech stocks were leading the pack of losers on Thursday’s market, as tech major and Google-parent Alphabet Inc. failed to meet market expectations, with net income declining 25% and the company recording a negative free cash flow of $9 billion in the quarter under review.

MarketWatch data showed that the Dow Jones Industrial Average was trading 0.20% lower at 52,339 points as of 10:05 am (ET), in comparison to 52,475 points at the previous equity market close.

The S&P 500 was trading 0.35% lower at 7,716 points on Thursday’s US market, compared to 7,743 points at the previous stock market close, as per the exchange data.

The Nasdaq 100 crashed 1.8% to hit an early market low of 29,257.16 points during the morning trading session on October 29, in comparison to 29,813,16 points at the previous equity market close.

As of 10:15 am (ET), the Nasdaq 100 index recovered some of its losses and was trading 1.2% lower at around 29,399 points during the trading session on Thursday.

Stocks like Alphabet down 12%, Honeywell Aerospace down 11%, Salesforce down 4.5%, Amazon down 2.9%, ServiceNow down 24%, and Microsoft down 0.6% were among other laggards on Thursday’s market.

PCE inflation data

The latest US Personal Consumption Expenditure (PCE) data for September 2026 showed that American consumers paid more for gasoline and other energy-related products, in line with market estimates, as investors now focus on the higher potential for a possible US Fed rate hike in the December policy meeting.

The PCE Price Index surged 0.5% in September 2026, after a 0.3% rise in August 2026, according to the data collected from the Bureau of Economic Analysis website on October 29.

The data further showed that the PCE inflation rate in the US economy now advanced to 3.6% in September 2026, in comparison to 3.4% in August 2026, indicating higher prices levels in the economy.

After the PCE data release, the CME Group’s FedWatch tool suggests that there is an 81.3% probability of a 25 basis point rate hike at the December policy meeting to the 4-4.25% range.

However, the experts also predict that there is an 18.7% chance of the central bank keeping the interest rates on hold much like the October 2026 policy meeting.